The International Monetary Fund (IMF) announced that its Executive Board was expected to consider Uganda’s Post-Financing Assessment (PFA) in January 2026, raising new questions about the country’s fiscal management and economic trajectory. The assessment follows the expiration of Uganda’s billion-dollar Extended Credit Facility in June 2024, prompting the government to seek fresh financial support from the Fund.
A PFA is required for countries with significant outstanding IMF credit but without an active IMF-supported or staff-monitored program. It examines the soundness of a country’s economic policies, the sustainability of its macroeconomic framework, and its ability to repay the IMF. Uganda fell squarely within this category, triggering a detailed evaluation.
In a statement issued from Washington, D.C., the IMF confirmed that a team led by Jesmin Rahman visited Kampala from November 3 to 7 to carry out the assessment. According to the Fund, Uganda’s capacity to repay remained adequate even under combined domestic and external shocks. The mission also reported that Uganda’s economic growth for the 2024/25 fiscal year stood at 6.3 percent, driven by broad-based expansion across key sectors.
Inflation, the IMF noted, stayed below the Bank of Uganda’s medium-term target of 5 percent, while the country’s gross international reserves strengthened, supported by rising exports, increased capital inflows, and higher foreign exchange purchases by the central bank. These indicators painted a largely positive macroeconomic picture.
However, the Fund pointed to a sharp deterioration in Uganda’s fiscal position during FY2024/25. This decline was attributed to a spike in current expenditures, including several one-off commitments that widened the fiscal gap. The revelation intensified debate among economists and political observers about the government’s spending priorities and its readiness to engage with the IMF for new financing.
Looking ahead, the IMF projected that Uganda’s near-term economic prospects remained favorable, with expectations of stronger performance once oil production begins in FY2026/27. Still, the Fund warned that the outlook was vulnerable to global trade disruptions, financial volatility, and potential slippages in domestic fiscal policy.
The upcoming IMF Board decision has already stirred debate in Kampala’s policy circles, with some analysts arguing that Uganda must demonstrate greater fiscal discipline before securing new financial arrangements, while others insist that fresh IMF support is crucial for maintaining economic stability during the transition toward anticipated oil revenues.
